**Exhibit 10.35**

 

**TODHUNTER INTERNATIONAL, INC.**

**222 Lakeview Avenue, Suite 1500**

**West Palm Beach, FL 33401**

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**SALARY CONTINUATION PLAN AGREEMENT**

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**THIS SALARY CONTINUATION PLAN AGREEMENT** (this “Agreement” or the “Plan”) is enteredinto this **20th day of February 2004,** between TodhunterInternational, Inc., a Delaware corporation (hereinafter referred to as the“Corporation”), and **Chester Brandes**(the “Executive”).

 

**WITNESSETH**:

 

**WHEREAS**,the Executive is employed by the Corporation; and

 

**WHEREAS**,the Corporation recognizes the valuable services performed by the Executive andwishes to encourage his continued employment; and

 

**WHEREAS**,the Executive wishes to be assured that (i) he will be entitled to a certainamount of additional compensation for some definite period of time from andafter his retirement from active service with the Corporation or othertermination of his employment; (ii) he will be entitled to a disability benefitin the event of his disability; and (iii) his estate will be entitled to adeath benefit after the Executive’s death if such death occurs during theExecutive’s employment with the Corporation; and

 

**WHEREAS**,the parties hereto wish to provide the terms and conditions upon which theCorporation shall pay such retirement benefit, disability benefit or deathbenefit; and

 

**WHEREAS**,the parties hereto intend that this Agreement be considered an un-fundedarrangement, maintained primarily to provide deferred compensation benefits forthe Executive, a member of a select group of management or highly compensatedExecutives of the Corporation, for purposes of the Employee Retirement SecurityAct of 1974, as amended (“ERISA”);

 

**NOW THEREFORE**, in consideration of the premises and of the mutual promises hereincontained, the parties hereto agree as follows:

 

**1.             Retirement Benefit**.

 

A.            Fromand after termination of the Executive’s employment, after the attainment ofage 65, other than by reason of his death, the Corporation shall thereafter paythe Executive the sum of **$45,000.00** per annum for a period of fifteen(15) years, payable in equal monthly installments, commencing with the firstday of the month following such termination. Retirement prior to age 65 withthe consent of the Corporation shall result in a retirement benefit based on afraction, the denominator of which is anticipated years of service to age 65from **February20, 2004** and the numerator of which is actual years of servicefrom such date.  The fraction so derivedshall be applied to the above stated retirement benefit resulting in the reducedearly retirement benefit.

 

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B.            Inthe event of the Executive’s death after termination of his employment, butprior to the expiration of said fifteen (15) year period, the Corporation shallcontinue to make said payments during the remainder of said fifteen (15) yearperiod to the Executive’s estate.

 

**2.             Death Benefit**.  TheExecutive and the Corporation have entered into an Endorsement Split-DollarAgreement dated **February 20, 2004** that provides for thepayment of certain death benefits to the Executive’s estate if the Executivedies while such Endorsement Split-Dollar Agreement is in force.  It is the intent of the Corporation and theExecutive that: (A) in all events the Endorsement Split-Dollar Agreement willbe cancelled and no death benefit will be paid to the Executive’s estate oncethe executive becomes entitled to receive the retirement benefit payments setforth in Paragraph 1.A; and (B) the Executive will be entitled to receive thedeath benefits set forth in Endorsement Split-Dollar Agreement only if he dieswhile such agreement is in force, that is during the Executive’s employmentwith the Corporation or after a Change in Control provided the Executive hasnot become entitled to receive the retirement benefit payments set forth inParagraph 1.A.

 

**3.             Disability Benefit**.  In theevent that the Executive becomes “permanently and totally disabled,” within themeaning of § 22 (e)(3) of the Internal Revenue Code of 1986, as amended (the“Code”), as determined by the Corporation, while in the employ of theCorporation, the Corporation shall pay the Executive a disability benefit insubstantially equal installments over a period of sixty (60) months. The amountof such monthly disability benefit shall be equal to 1/60 of the annualretirement benefit which would be payable to the Executive under Paragraph 1 ofthis Agreement, multiplied by the number of complete consecutive twelve monthperiods beginning on **February 20, 2004**, provided howeverthat such disability income benefit is not to exceed 100% of the retirementbenefit stated in Paragraph 1 above. Such monthly payments shall commencewithin thirty (30) days following the Corporation’s determination ofdisability. In the event of the death of the Executive after monthly paymentsunder this paragraph have commenced, but before expiration of the sixty (60)month period, the unpaid balance of payments shall continue to be paid by theCorporation to the Executive’s estate.

 

**4.             Acceleration of Benefit Payments**. Notwithstanding the provisions set forth in Paragraphs 1 or 3 of thisAgreement, the Corporation may elect to accelerate the payment of any amountslisted in such Paragraphs and make payment in a lump sum equal to the netpresent value of such payments discounted at an interest rate equal to the thirty(30) year U.S. Treasury Bill rate at the time of such proposed payment, withoutthe consent of the Executive or the Executive’s estate, in full satisfaction ofthe Corporation’s obligations under Paragraph 1 or 3 of this Agreement, as thecase may be.

 

**5.            ****Forfeiture of Rights and Benefits**.  All rights and benefits under this Agreementshall be forfeited if the Executive violates the prohibitions set forth in theemployment agreement between the Executive and the Corporation in effect as ofthe date of this Agreement relating to the disclosure of confidentialinformation or the restriction of competition with the Corporation.  In the event there is no employmentagreement between the Executive and the Corporation on the date of thisAgreement, all rights and benefits under this Agreement shall be forfeited ifthe Executive engages in any of the following proscribed activities during thetwo (2) year period beginning upon the occurrence of any event described inParagraph 1 or 3 (the “Date of Termination”).

 

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Executivewill not, directly or indirectly: (i) engage in any trade or business in theliquor industry, relating to the manufacturing or national marketing of anybrand of distilled spirits, anywhere in the United States or such other countryor countries in which the Corporation or any of its Subsidiaries (as definedbelow) actively engages in its trade or business as of the Date of Termination(“Territory”);  (ii) become associated as a manager, supervisor,employee, consultant, advisor, control shareholder (either individually or aspart of an affiliated group), or otherwise of any person, corporation or entityengaging in any capacity in such segment of the liquor industry anywhere in theTerritory;  (iii) call upon any clientor clients of the Corporation or any of its Subsidiaries for the purpose ofselling or soliciting for any person, corporation or entity, other than any ofthe Corporation or its Subsidiaries, sales of any products, processes, orservices in any capacity in such segment of the liquor industry within theTerritory;  (iv) divert, solicit or takeaway any such client or clients of the Corporation or any of its Subsidiariesfor the purpose of selling any products or services in any capacity in suchsegment of the liquor industry; and service any contracts or accounts relatingto any products or services in any capacity in such segment of the liquorindustry for any person, corporation or entity other than the Corporation orany of its Subsidiaries; or  (v) induce,influence, combine or conspire with, or attempt to induce, influence, combineor conspire with, any of the officers or employees of the Corporation or any ofits Subsidiaries to terminate his or her employment with or to compete againstthe Corporation or any of its Subsidiaries in any capacity in such segment ofthe liquor industry.  The Executiveshall not at any time disclose any confidential or trade secret of theCorporation or any of its Subsidiaries or any client of the Corporation or anyof its Subsidiaries, or utilize such confidential information or trade secretfor the Executive’s own benefit, or for the benefit of third parties.  The term “confidential information or tradesecret of the Corporation or any client of the Corporation” does not includeany information which becomes generally available to the public other than bybreach of this provision.  The Executivemay disclose confidential information where such disclosure is required byapplicable law or court process (but only after giving the Corporation writtennotice so that the Corporation may attempt to obtain a protective order).  For purposes of this paragraph, the term“Subsidiaries” shall mean and include any entities in which the Corporationowns, directly or indirectly, ten percent (10%) or more of the outstandingequity interests as of the Date of Termination.

 

**6.             No Trust Created**.  Nothingcontained in this Agreement, and no action taken pursuant to its provisions byeither party hereto, shall create, nor be construed to create, a trust of anykind or a fiduciary relationship between the Corporation and the Executive orany other person.

 

**7.             Unsecured General Creditor Status of theExecutive**.

 

A.            Thepayments to the Executive or his estate shall be made from assets which shallcontinue, for all purposes, to be a part of the general, unrestricted assets ofthe Corporation.  No person shall havenor acquire any interest in any such assets by virtue of the provisions of thisAgreement.  The Corporation’s obligationhereunder shall be an unfunded and unsecured promise to pay money in thefuture.  To the extent that theExecutive or any person acquires a right to receive payments from theCorporation under the provisions hereof, such right shall be no greater thanthe right of any unsecured general creditor of the Corporation.  No such person shall have nor require anylegal or equitable right, interest or claim in or to any property or assets ofthe Corporation.

 

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B.            Inthe event that, in its discretion, the Corporation purchases an insurancepolicy or policies insuring the life of the Executive (or any other property)to allow the Corporation to recover the cost of providing the benefits, inwhole or in part, hereunder, neither the Executive, his personalrepresentative, legal representative, successors and permitted assigns, nor anyother person have nor acquire any rights whatsoever therein or in the proceedstherefrom, except as set forth in the Endorsement Split-Dollar Agreementbetween the Corporation and the Executive dated **February 20, 2004**.  The Corporation shall be the sole owner andbeneficiary of any such policy or policies and, as such, shall possess and, mayexercise all incidents of ownership therein. No such policy, policies, or other property shall be held in trusteither for the Executive or any other person or as collateral security for anyobligation of the Corporation hereunder.

 

**8.             No Contract of Employment**.  Nothingcontained herein shall be construed to be a contract of employment for any termof years, nor as conferring upon the Executive the right to continue to beemployed by the Corporation, in any capacity.

 

**9.             Termination of Agreement**.  ThisAgreement shall be cancelled and shall terminate upon the termination of theExecutive’s employment with the Corporation for any reason other than thereasons described in paragraphs 1, 2, or 3 of this Agreement.

 

**10.          Termination of Agreement in Connection with aChange in Control**.

 

A.            Notwithstandinganything in this Agreement to the contrary, unless the Executive is terminated“for cause,” as defined in Paragraph 10.C. of this Agreement, the Corporationmay not terminate this Agreement without the consent of the Executive duringthe period beginning nine (9) months before a Change in Control (as definedbelow).

 

B.            Forthe purpose of this Agreement, a “Change of Control” shall mean any of thefollowing events:

 

(i)            Theacquisition by any person, entity or “group” required to file a Schedule 13D orSchedule 14D-1 promulgated under the Securities Exchange Act of 1934, asamended (the “Exchange Act”) (excluding, for this purpose, any of the followingthat acquires beneficial ownership of voting securities of the Corporation,including shares acquired pursuant to the exercise of options or warrants, orconversion of preferred stock outstanding as of the date hereof: (a) CLFinancial, Ltd., Angostura Ltd., or any of their affiliates; (b) theCorporation, its affiliates or subsidiaries; (d) V&S Vin & Spirit AB,its affiliates or subsidiaries, solely in connection with a transaction withthe Corporation, its affiliates or subsidiaries approved by the Board ofDirectors; or (d) any employee benefit plan of the Corporation, or itsaffiliates or subsidiaries), of beneficial ownership (within the meaning ofRule 13d-3 promulgated under the Exchange Act) of over 40% (in one or moretransactions, in the aggregate) of either the then outstanding shares of commonstock or the combined voting power of the Corporation’s then outstanding votingsecurities entitled to vote generally in the election of directors; or

 

(ii)           An election orappointment to the Board of Directors by virtue of which the individuals whoimmediately prior thereto constituted the Board of Directors (the “IncumbentBoard”) no longer constitute at least a majority of the Board of Directors(other than an election or appointment of a director or directors precipitatedby CL Financial, Ltd., Angostura Ltd., V&S Vin & Spirit AB, or any oftheir affiliates, or by the

 

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Board of Directors ifat that time at least a majority are individuals who are directors on the datehereof), provided that any person who becomes a director subsequent to the datehereof whose election, or nomination for election by the Corporation’sstockholders, was approved by a vote of at least a majority of the IncumbentBoard (other than an election or nomination of an individual whose initialassumption of office is in connection with an actual or threatened electioncontest relating to the election of the Directors of Employer, as such termsare used in Rule 14a-1 promulgated under the Exchange Act) shall be, forpurposes of this Agreement, considered as though such person were a member ofthe Incumbent Board; or

 

(iii)          Approval by the stockholders of theCorporation of: (a) a reorganization, merger or consolidation by reason ofwhich persons who were the stockholders of the Corporation immediately prior tosuch reorganization, merger or consolidation do not, immediately thereafter,own more than fifty percent (50%) of the combined voting power entitled to votegenerally in the election of directors of the reorganized, merged orconsolidated company’s then outstanding voting securities; or (b) a liquidationor dissolution of the Corporation or the sale of all or substantially all ofthe assets of the Corporation, whether such assets are held directly orindirectly (excluding the currently proposed joint ventures with affiliates ofCL Financial, Ltd. and/or V&S Vin & Spirit AB, if such transactionsconstitute a sale of substantially all of the assets of Employer).

 

C.            Thedefinition of “for cause” termination shall be the same as set forth in theemployment agreement between the Executive and the Corporation in effect as ofthe date of this Agreement.  In theevent there is no employment agreement between the Executive and theCorporation on the date of this Agreement, “cause” for termination shall mean that (a) theExecutive is convicted of a felony which, in the sole determination of theBoard of Directors, would have a material adverse effect on Executive’s abilityto perform his duties hereunder or on the business or reputation of theCorporation; (b) the Executive has exhibited gross misconduct resulting inmaterial harm to the Corporation, its business or reputation; (c) the Executivehas willfully misappropriated the Corporation’s assets or has otherwisewillfully defrauded the Corporation, including without limitation by fraud, theft,embezzlement, or breach of a fiduciary duty involving personal profit.  For purposes of this paragraph, no act orfailure to act on the Executive’s part shall be considered “willful” unlessdone, or omitted to be done, by him not in good faith and without reasonablebelief that his action or omission was in the best interests of theCorporation.

 

**11.          Named Fiduciary**.  TheCorporation is hereby designated the “Named Fiduciary” as such term is definedin ERISA.  As Named Fiduciary, theCorporation shall be responsible for the management and administration of theterms of this Agreement. The Corporation’s Board of Directors may delegate toothers the management and operating responsibilities of the plan including theemployment of advisors and may exercise any other powers necessary for thedischarge of its duties to the extent not in conflict with the provisions ofERISA.

 

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**12.          Claims Procedure**.

 

A.            Ifthe Executive or his beneficiary believes that he is being denied a benefit towhich he is entitled under this Agreement (hereinafter referred to as a“Claimant”), such Claimant may file a written request for such benefit with theCorporation setting forth his claim.  Therequest must be addressed to the President of the Corporation at its thenprincipal place of business.

 

B.            TheCorporation shall reply to the Claimant’s claim within ninety (90) days ofreceiving the claim.  If the claim isdenied in whole or in part, the Corporation shall adopt a written opinion,using language calculated to be understood by the Claimant, setting forth:

 

(i)            Thespecific reason or reasons for such denial;

 

(ii)           Thespecific reference to pertinent provisions of this Agreement on which suchdenial is based;

 

(iii)          Adescription of any additional material or information necessary for theClaimant to perfect his claim and an explanation why such material or suchinformation is necessary;

 

(iv)          Appropriateinformation as to the steps to be taken if the Claimant wishes to submit the claimfor review; and

 

(v)           Thetime limits for requesting a review under subparagraph C. and for review undersubparagraph D. hereof.

 

C.            Withinsixty (60) days after the receipt by the Claimant of the written opiniondescribed above, the Claimant may request in writing that the Secretary of theCorporation review the determination of the Corporation. Such request must beaddressed to the Secretary of the Corporation, at the Corporation’s thenprincipal place of business. The Claimant or his duly authorized representativemay, but need not, review the pertinent documents and submit issues andcomments in writing for consideration by the Corporation. If the Claimant doesnot request a review of the Corporation’s determination by the Secretary of theCorporation within such sixty (60) day period, he shall be barred and estoppedfrom challenging the Corporation’s determination.

 

D.            Withinsixty (60) days after the Secretary’s receipt of a request for review, he willreview the Corporation’s determination. After considering all materialspresented by the Claimant, the Secretary will render a written opinion, writtenin a manner calculated to be understood by the Claimant, setting forth thespecific reasons for the decision and containing specific references to the pertinentprovisions of this Agreement on which the decision is based. If specialcircumstances require that the sixty (60) day time period be extended, theSecretary will so notify the Claimant and will render the decision as soon aspossible, but no later than one hundred twenty (120) days after receipt of therequest for review.

 

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**13.          Non-Assignability of Benefits**.  TheExecutive may not transfer, assign, anticipate, hypothecate or otherwiseencumber any part or all of the amounts payable hereunder, which are expresslydeclared to be unassignable and non-transferable. Any such attempted assignmentor transfer shall be void and shall terminate this Agreement; the Corporationshall thereupon have no further liability hereunder. No amount payablehereunder shall, prior to actual payment thereof, be subject to seizure by anycreditor of the Executive for the payment of any debt, judgment or otherobligation, by a proceeding at law or in equity.

 

**14.          Amendment**.  ThisAgreement may be amended at any time and from time to time, by a writteninstrument signed by the Corporation and the Executive.

 

**15.          Binding Effect**.  All ofthe terms and provisions of this Agreement shall be binding upon, inure to thebenefit of, and be enforceable by the parties and their respectiveadministrators, personal representatives, legal representatives, heirs,successors and permitted assigns, whether so expressed or not.

 

**16.          Notices**.  Anynotice, consent or demand required or permitted to be given under theprovisions of this Agreement shall be in writing, and shall be signed by theparty giving or making the same.  Ifsuch notice, consent or demand is mailed to a party hereto, it shall be sent byUnited States certified mail, postage prepaid, addressed to such party’s lastknown address as shown on the records of the Corporation. The date of suchmailing shall be deemed the date of notice, consent or demand.

 

**17.          Governing Law**.  ThisAgreement and all transactions contemplated by this Agreement shall be governedby, and construed and enforced in accordance with, the internal laws of theState of Florida without regard to principles of conflicts of laws.

 

**18.          Jurisdiction and Venue**.  Theparties acknowledge that a substantial portion of the negotiations, anticipatedperformance and execution of this Agreement occurred or shall occur in PalmBeach County, Florida.  Any civil actionor legal proceeding arising out of or relating to this Agreement shall bebrought in the courts of record of the State of Florida in Palm Beach County orthe United States District Court, Southern District of Florida.  Each party consents to the jurisdiction ofsuch Florida court in any such civil action or legal proceeding and waives anyobjection to the laying of venue of any such civil action or legal proceedingin such Florida court.  Service of anycourt paper may be effected on such party by mail, as provided in thisAgreement, or in such other manner as may be provided under applicable laws,rules of procedure or local rules.

 

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**N WITNESSWHEREOF**, the partieshereto have set their hands on the day and year first hereinabove written.

 

 

**TODHUNTERINTERNATIONAL, INC.**

 
| By: | /s/ Jay S. Maltby | , Chairman, CEO &  President |
|-----|-------------------|---------------------------------------|

 

 

**EXECUTIVE:**

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| By: | /s/ Chester Brandes | , Vice President –  International Sales |
|-----|---------------------|----------------------------------------------|

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